Net interest income for the first quarter increased 37% to $6.4 million from $4.7 million in the year-earlier quarter, primarily reflecting an increase in interest-earning assets related to both acquisitions and organic growth. The Company's net interest margin for the second quarter of 2011 decreased six basis points to 3.36% on a linked-quarter basis from 3.42% in the first quarter of 2011, and declined 19 basis points from 3.55% in the year-earlier period, reflecting excess liquidity related to the Company's capital raise in the fourth quarter of 2010 and acquisition activity, as those funds are currently deployed in lower-yielding investments.
The Company's total risk-based capital ratio at June 30, 2011, was 23.4%, significantly exceeding the required minimum of 10% to be considered a well-capitalized institution. This reflected, in part, the Company's second-step conversion and offering that was completed in November 2010, raising net proceeds of $61.4 million. The ratio of tangible common equity to total tangible assets was 12.3% as of June 30, 2011.
In the second quarter of 2011, the Company continued to post loan and deposit growth, with both increasing on a linked-quarter basis and rising significantly compared with the year-earlier quarter in all of its markets except Ocala. Ocala has been disproportionately affected by the real estate downturn and higher unemployment. Still, bank acquisitions, including the Company's second whole-bank acquisition in February 2011, accounted for much of the growth in loans and deposits over the past 12 months. At June 30, 2011, the Company's loan portfolio totaled $500.7 million, including loans acquired through FDIC-assisted acquisitions, up 1% from $496.1 million at March 31, 2011, including loans acquired through FDIC-assisted acquisitions. Total deposits stood at $763.7 million at the end of the second quarter of 2011, up 4% from $731.1 million at March 31, 2011.
Accounting for FDIC-Assisted LoansThe Company performs ongoing assessments of the estimated cash flows of its acquired FDIC-assisted loan portfolios. The FDIC-assisted loan portfolios consist of $60.4 million in covered and $24.2 million in non-covered loans as of June 30, 2011. The details of the accounting for the FDIC-assisted loan portfolios for the second quarter of 2011 are as follows:
- Covered loans acquired in FDIC-assisted acquisitions decreased $1.9 million from the first quarter of 2011;
- Non-covered loans acquired in FDIC-assisted acquisitions declined $4.0 million during the quarter;
- The FDIC indemnification asset associated with covered loans acquired in FDIC-assisted acquisitions remained unchanged at $58.2 million;
- The non-accretable discount decreased $3.7 million to $67.3 million; and
- The accretable discount increased $1.4 million to $4.1 million, and $224,000 was transferred to income.
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